The phrase “new cold war” should never have been coined. Nothing in the original stand off between the Soviet Union and the US could prepare the global economy for what Donald Trump is demanding of America’s trading partners. Moscow and Washington existed in separate orbits. Now the rest of the world is being asked to make a choice between China and the US, two intimately entwined economies. Nor does the label “trade war” begin to capture the dimensions of what this implies.
America’s partners are being pressured to eject Huawei, China’s leading telecoms equipment supplier, from their 5G networks. But Mr Trump’s all-or-nothing ultimatum is by no means confined to Huawei. Almost every Chinese product is now under suspicion of concealing the “Manchurian chip” — backdoor technology that can lie dormant until it is activated.
Israel, for example, is being asked to dump a Chinese construction company that is deepening the port of Haifa. It is also under pressure to cut ties with another Chinese contractor that is building a metro in Tel Aviv.
Barring commodities such as soyabean or pork, the internet of things makes almost every product a potential dual-use technology in a future US-China conflict. They used to say ploughshares could be converted into swords. How about refrigerators? Or children’s toys? Once you start down the road of excluding anything with Chinese-embedded chips, it is hard to know where to stop. The line between legitimate national security concerns and outright paranoia is perilously thin.
That line was obliterated at a conference in Paris this week with the misleadingly dull title “International cooperation on artificial intelligence”. In reality the gathering — co-hosted by the Washington-based Atlantic Council — was the first effort to stimulate talks between the US and China on the future of AI, which covers pretty much the future of everything, including warfare.
The Trump administration official, whom I cannot name under the gathering’s “Chatham House rule”, opened by declaring that the US would not co-operate with China on AI while it remained authoritarian. Companies around the world had to choose between two AI systems, said the official. One, led by the US, was based on trust and openness. The other, China, was closed and “malicious”. The latter was exporting “authoritarian software” to every continent.
A Chinese official responded by saying that the US killed innocent civilians in Iraq and Afghanistan. “Nobody is perfect in human rights,” he said. The exchange almost ended the conference before it began. It offered a troubling foretaste of how much could go wrong between the world’s two great powers. The French co-hosts, which included two former prime ministers, could only make forlorn pleas for dialogue.
It is an open question whether Mr Trump will agree to a ceasefire with China in their trade war over the coming weeks. Worries about his re-election prospects in 2020 suggest Mr Trump might go for some kind of truce. Such a deal could even include a brief reprieve for Huawei. Quite how he would sell that one to the increasingly hawkish bipartisan voices back home is another matter. Democrats would be sure to attack him for folding too cheaply. Mr Trump’s short-term actions are unpredictable.
But his larger China strategy is unchanging. It is hard to overstate its radicalism. Over the past 40 years, the US has taken a “win-win” approach to China. The more it could be bound into the global economy, the freer its political system would become. Reality has belied that theory. China is considerably less free today than it was in 2001 when it joined the World Trade Organization. Its social credit system, which ranks citizens based on their behaviour, offers an Orwellian vision of how people can be controlled by authoritarian software. Yet its economy is about three times larger than it was then.
Mr Trump is thus turning that strategy on its head. We have moved from a “win-win” American vision of globalisation to “win-lose”. In fact, what Mr Trump is pursuing is closer to “lose-lose” — everybody loses if globalisation goes into reverse. Under Mr Trump’s plan, the US ultimately wins because it would lose more slowly than China.
The Paris AI gathering this week was supposed to be about the implications of machine learning. A century after the first world war, what it highlighted was the urgent need for human learning.